The agreement dropped plans for a big government role in the health insurance market (aka, the public option), which had been a deal-breaker for a handful of centrist Democrats, but in exchange for that compromise it expands access to healthcare through Medicare to workers as young as 55.
Other issues remain to be resolved, notably on cost-cutting and public funding of abortion services, but the public option had been a show-stopper in the Senate.
“This has been a long journey. We have confronted many hurdles, and tonight I believe we have overcome yet another one,” said Senate majority leader Harry Reid in a statement Tuesday night. “I know not all 10 senators in the room agree on every single detail of this, nor will all 60 members of my caucus ... [but] tonight we are confident."
A public-option task force
In a bid to resolve this issue, Senator Reid tasked 10 Democrats – five moderates and five progressives – to come up with a compromise that would keep all 60 members of the Democratic caucus on the bill. Lawmakers in both Democratic camps were threatening to vote down the bill over the public-option issue.
Sen. Joseph Lieberman of Connecticut, an Independent centrist who caucuses with Democrats, had said he would filibuster the bill if it included a strong public option. Progressive Sen. Bernard Sanders had said he would filibuster if it did not. With no support from Republican senators, Democrats need them both to push through health reform.
The deal proposes, in place of a government-run insurance program, mandating private, nonprofit companies to administer low-cost national insurance policies, along the lines of the health plans offered to members of Congress and federal workers. The federal Office of Personnel Management would set up the new national plan but nonprofit private companies would run it.
Details of the agreement won’t be set until the nonpartisan Congressional Budget Office (CBO) gives its report on the cost of the bill with the public-option compromise, expected this week. President Obama and congressional Democrats say they are committed to designing a plan that adds not a dime to the federal deficit.
After a bill goes to the CBO, there will be considerable back-and-forth – both sides insist this is not bargaining – to ensure that the legislation is budget-neutral. If the bill clears the Senate, Democrats still expect hard bargaining with the House, whose version of the bill includes a strong public option.
Why moderate Democrats won this fight
But in any standoff between the centrist and progressive wings of the Democratic Party, at least for now, the centrists have an edge: Red-state moderates could lose reelection if they vote a position too far from that their constituents on healthcare reform, posing a threat to the Democratic majority in both the House and Senate.
Moreover, a review of senators' voting record on healthcare amendments over the past two weeks shows that moderates are much more willing to break with their caucus than are progressives.
In his bid for compromise on the public option, majority leader Reid asked 10 Democrats to negotiate differences over the public option. These included moderate Sens. Mark Pryor of Arkansas, who led the centrists; Thomas Carper of Delaware; Mary Landrieu of Louisiana; Blanche Lincoln of Arkansas, and Ben Nelson of Nebraska. Progressives were Sens. Charles Schumer of New York, who also chairs the campaign arm of the Senate Democratic caucus; Sherrod Brown of Ohio; Russ Feingold of Wisconsin; Tom Harkin of Iowa, and John Rockefeller of West Virginia.
Since the first votes on amendments on Dec. 3, moderates on the negotiating team crossed party lines to vote with Republicans 17 times, on issues ranging from cuts to Medicare and home health services to tort reform. Senator Nelson of Nebraska voted with Republicans on all but 2 of 16 votes. Progressives split with the party only once.
But progressives say their votes can’t be taken for granted.
“While I appreciate the willingness of all parties to engage in good-faith discussions, I do not support proposals that would replace the public option in the bill with a purely private approach,” said Senator Feingold, a negotiator, in a statement Tuesday night. “We need to have some competition for the insurance industry to keep rates down and save taxpayer dollars. I will base my vote on the bill
on the entirety of what is in the bill, and whether I think the bill is good for Wisconsin.”
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